Shropshire parents who face rising school fees must plan ahead if they want to successfully fund their children’s education.
Tony Elliott, our Senior Tax Planner at Dyke Yaxley said careful planning made paying for your children’s or grandchildren’s education a lot less painful.
“Whether you’re a parent with a child aged over 18 who is going to university or a grandparent paying for school fees or university, it makes clear financial sense to put well thought-out plans in place.”
He said the plan could be used not only to cover standard school and university fees, but also the additional costs such as living and boarding expenses, equipment, tuition fees and study materials.
“You could also use the plan to provide a nest egg for children and grandchildren in the future, to maybe help them get onto the property ladder in years to come.
“By producing a tax plan, you can structure your approach to make sure each child’s personal allowance and lower income tax rating is used, rather than paying the fees through post-tax income.
“This approach will also avoid shareholders having to resort to withdrawing large sums of money from their company, which is good news as each time you make a withdrawal, there’s a tax implication.
“And those tax charges can be significant – up to 37.5% on dividend income or 47% on salary and bonus payments.”
Tony said it was important to take professional advice to help safeguard your money and to make sure you were making the most efficient investments.
“The cost of educating one child can be enormous, and that’s before you take uniforms and accommodation costs into consideration.
“If you multiply this for two or three children, then the situation can be overwhelming.
“But by planning carefully, you can find the funds you need, but at the same time ensure you’re saving money and that your savings and investments are as tax-efficient as they can be.”
Dyke Yaxley’s Tony Elliott
